The Economic Analyst

Dashboard lights…

SEPTEMBER 23, 2010

Have you ever been driving along when all of a sudden a light comes on your dashboard? What do you do? Do you keep driving and just hope it corrects itself with no effort on your part and no ill effect? What if several lights come on simultaneously...and there's someone in your passenger seat telling you to deal with the problem before it blows up in your face?

A quick tour through the board stats- October 2010

NOVEMBER 03, 2010

By now many of the big real estate boards have reported their October numbers. Ottawa, Winnipeg, and Montreal being the notable exceptions as well as the national board, CREA. Let's take a quick tour across the country from west to east and see how things are shaping up using information directly form the horse's mouth (board press releases). Let's also watch for examples of the spin machines being put into overdrive! Victoria (VREB.org): Real estate sales rise in October

Today's headlines

NOVEMBER 17, 2010

US core CPI lowest in 50 years

Toronto new home sales tank....condo sales soar

NOVEMBER 22, 2010

The Toronto market continues to defy logic. After tanking 32% in September, we find out that Toronto home sales managed to eke out a 0.6% gain over last October. New home sales up in GTA Yet in a bizarre dichotomy, the actual breakdown of that stat reveals a jaw dropping rise of 27 percent in new condo sales being offset by an equally staggering 32% drop in new lowrise home sales. As the article notes, seven out of ten new homes sold in October were condos.

Teranet House Price Index shows widespread declines in September

NOVEMBER 24, 2010

The Teranet House Price index recorded broad month-over-month declines in September. This index calculates price changes by tracking the observed or registered home prices over time. Properties with at least two sales are required in the calculations. Such a “sales pair” measures the increase or decrease of the property value in the period between the sales in a linear fashion. It's methodology is similar to the widely referenced Case/Shiller index out of the US.

Quick tour through the board stats- November 2010

DECEMBER 03, 2010

It's that time of the month again. We once again turn our eyes to the big realtor boards and dissect the sales, inventory, and price trends in their real estate markets. Victoria Sales totaled 479, representing a rise over the previous few months, but remaining 21% lower than last year's numbers and standing at near decade lows.

Note to Toronto condo investors: Get out while the getting's good

DECEMBER 09, 2010

I've stuck my neck out and predicted that once Canada's credit bubble bursts, it will wreak havoc on the national real estate market. I believe that we are in a national housing bubble. Though not as extreme as the bubble in the US, it is nonetheless very problematic when one considers how the feedback mechanism of expanding credit and expanding real estate values artificially buoys the broader economy.

GTA home sales weaken in December; Particular weakness out of City of Toronto

DECEMBER 17, 2010

Home sales in the Greater Toronto Area had shown a significant rebound in year-over-year sales data since bottoming at a -34% reading in July. Home sales had improved on a year-over-year basis through to November, where sales came in a modest 13% below 2009 levels. However, the strengthening trend may well be in for a reversal if mid-month data is any indication. TREB reported today that mid-month sales came in 19% below year-ago levels across the GTA.

Quick tour through the board stats- December 2010

JANUARY 06, 2011

It’s that time of the month again. We once again turn our eyes to the big realtor boards and dissect the sales, inventory, and price trends in their real estate markets. Click on the city name to see the actual press release from each board. Victoria

Toronto condo data; China about to hit a wall?; Fiscal austerity to weigh on public sector jobs; The Age of Deleveraging; Another video primer

JANUARY 20, 2011

Toronto condo data The Toronto Real Estate Board released their most recent rental market report yesterday. It showed both a substantial jump in rental transactions and a jump in rental inventory.

Demographia Housing Affordability Survey released

JANUARY 24, 2011

7th annual Demographia Housing Affordability survey released Demographia has released its 7th annual housing affordability survey. The report examines the housing markets across the English speaking world by comparing the mean multiple (essentially the house price to income ratio) of various cities, highlighting land use regulations, and looking at other factors that influence price.

Quick tour through the board stats: January 2011

FEBRUARY 05, 2011

It's that time of the month again. Let's dive into the monthly board stats and see how things are shaping up. The board press releases can be found by clicking on the city name. Victoria Residential sales totaled 339, a decrease of 19% from last January's total of 418. Active listings rose slightly over December's numbers to sit just under 3300 units. This represents an increase of 15% over last January's inventory total of 2800 units.

Employment numbers rocking!; Building permits rise on new Ontario condo projects; Big banks begins hiking rates; Ignatieff warns on housing market risks

FEBRUARY 08, 2011

Employment numbers decidedly above expectation Expectations of 20,000 new jobs added in January were fully blown out of the water by the 69,000 new jobs added by the Canadian economy. Very impressive stuff. If we dig beneath the surface we do discover that while the headline number is still excellent, there are a few facts worth keeping in mind:

Public sector and their unions put on notice; Humourous commentary about 'bubblebloggers'

FEBRUARY 26, 2011

Public sector and their unions put on notice

More signs of a coming condo glut

MARCH 02, 2011

As I've noted before, the Toronto condo market is near its saturation point and looks set for a fall. The city currently has 286 active condo projects currently underway, representing 73,953 units — by far the most of any city in North America. This level of development is significantly outpacing the expected level of demand considering net household formation in the GTA.

Tour through the board stats: February 2011

MARCH 06, 2011

It's that time of the month again. Let's once again turn our eyes to the stats released by the big real estate boards and look for developing trends. You may recall that finance minister Jim Flaherty announced new mortgage rule changes back in January. Those rule changes are set to take effect in mid March and include primarily the shortening of allowable, insurable amortization lengths to 30 years from the current 35 years.

Tour through the board stats: March 2011

APRIL 05, 2011

It's that time of the month again. Time to turn our eyes to the month end sales data from the big real estate boards. Frankly these numbers may well be meaningless until a clear trend can be established next month. With new mortgage rule changes coming into effect mid month, there was a significant chance that sales were front loaded during the month as some people no doubt rushed to beat the new rules.

Tour through the board stats: April 2011

MAY 04, 2011

Examining house prices and rents in major Canadian cities

MAY 11, 2011

NOTE:  For more on why house prices and rents should pace each other over time, check out this article.  You may also be interested in how house prices and rents compare in other Canadian cities.

CREA releases home sales data; New report highlights speculation in Toronto condo market

MAY 17, 2011

CREA releases resale data for April 2011 It was widely reported by all the big media outlets and it shouldn't come as a surprise to anyone who has read the latest tour through the board stats.  CREA (the Canadian Real Estate Association) has released their final April numbers and they are not pretty, though the weakness in sales was far from unexpected.  Some key quotes:

The real estate industry spin machine in overdrive: Some Sunday reading to make you chuckle

MAY 29, 2011

I have nothing against the real estate industry in general.  I really don't.  At the end of the day, they are looking out for the best interest of their members.  I understand that.  It's really no different than the multitude of publicly-traded companies who try to spin negative news into a positive light for the benefit of their shareholders or management.  

Tour through the board stats: May 2011

JUNE 07, 2011

It's that time of the month again.  Time to look at the most recent board stats from across the country to see if any trends are emerging.  The story of the past few months has been the rot in Victoria and BC's lower mainland, flashing warning signs in Vancouver, and strength in Toronto on the back of exceptionally low inventory numbers.  Let's see how May shaped up...   Victoria:

Storm clouds over China; More data on the Toronto condo market; What's driving the Vancouver housing market?

JUNE 23, 2011

Storm clouds over China? All is not well in the People's Republic.  

Misleading averages and bad science

JULY 06, 2011

Don's really not a bad guy....confused, but nice.

House price and income ratios in Canadian cities: Part 2

JULY 12, 2011

We continue on with part 2 of our three-part series examining the price-income ratio of various Canadian cities. 

TV appearance: Does Toronto have a housing bubble?

JULY 18, 2011

As promised, here is the video of the TV show I was on last month.  The topic of the show:  Does Toronto have a housing bubble?

Tour through the board stats: July 2011

AUGUST 10, 2011

It's time to once again take a look at any emerging trends in the monthly real estate board stats. Victoria: As has been the case for many months now, the Victoria market continues to bleed.  And rightfully so.  We know what the price/income ratio looks like in that city...

'Affordability' measures.....still misleading; Consumer confidence tanking; Taking a page from the 'bull' play book

AUGUST 24, 2011

Affordability measures still misleading: One comment I often receive is that I don't give enough weight to the impact of purchasing power in analyzing the Canadian real estate market.  The argument is that since interest rates are falling, houses are more affordable, and therefore it should be expected that house prices show a marked dislocation from fundamentals like rents, incomes, and per-capita GDP.

How vulnerable are the economies of various Canadian cities? Part 1

SEPTEMBER 14, 2011

We begin a two-part series examining the role that housing-related industries have had in boosting economic and employment growth in various Canadian cities.   Part 2 can be read here.

House prices and rents: Reason for concern...Part 2

OCTOBER 03, 2011

Please read part 1 of this two part series for a detailed explanation of why house prices and rents tend to move in tandem over long periods of time.  In that post, we examined house prices and rents in some larger centres from BC east to Manitoba.  Today, Ontario and the rest.  If your town is not included, it's not for lack of trying on my part.  The available data only covers so many towns.

The week that was; Economics is all about "demand and demand"; Sherry Cooper sees positive demographic trends?

OCTOBER 14, 2011

What a week!

Canadian housing bubble in public consciousness; February new listings jump in key markets

MARCH 16, 2012

Canadian housing bubble in public consciousness An interesting chart below courtesy of Pacifica Partners.  Some may see this as a contrarian indicator but it sure wasn't in 2006 when all the searches were on the most bubbly regions of the US.  It’s hard to discount the role of perception and mass psychology when dealing with an emotion-driven asset like residential real estate, which represents the single largest purchase the typical household will ever make.

Population density and house prices: Should Vancouver command such a premium?

MARCH 21, 2012

It’s been frequently suggested that Vancouver’s lack of available land has driven house prices to extreme levels.  That same thought has also been used to justify Toronto house prices, though to a lesser degree. I want to share a couple thoughts on that front:   1)  The number of dwellings in every major Canadian city has increased in line with growing population. 

"Balanced market" nonsense

AUGUST 15, 2012

I had to chuckle at the following quotes: "The vast majority of markets had sales-to-new listings ratios consistent with balance between supply and demand, including Toronto and Vancouver" -RBC "Based on a sales-to-new listings ratio of between 40 to 60 per cent, two thirds of all local housing markets were in balanced market territory in July" -CREA

More signs of market weakness in Vancouver, Toronto; Spin machine goes into overdrive

OCTOBER 03, 2012

Just a quick note to highlight the latest sales data out of Vancouver and Toronto.   Vancouver: September sales in Vancouver plunged 32% year/year and 42% below decade average:

House sales in October: Better, but not quite as strong as reported

NOVEMBER 15, 2012

October resale numbers are out.  In general, the sales trend picked up in most metros relative to September, but the improvement was not quite as sharp as reported.

Mid-month Toronto resale numbers reveal deep sales slump; The Economist on global household debt levels

NOVEMBER 20, 2012

Mid-month Toronto resale numbers reveal deep sales slump Yesterday, TREB released their November mid-month sales figures.  A couple interesting points:

10 Canadian Housing and Economic Trends to Watch in 2013: Part 1

JANUARY 01, 2013

Part two of this series can be read here. First off, Happy Holidays and all the best for the New Year! On the housing and macro economic front, 2013 is shaping up to be…..interesting, to say the least.  While I no longer enjoy the free time to blog on a regular basis, I will endeavor to keep readers ahead of the big trends by posting as often as my schedule permits.  I do appreciate the loyal readership.

What's next for the Toronto housing market?

JANUARY 30, 2013

What's next for the Toronto housing market? That will be one of the topics on the agenda on February 21st when I'll be in Toronto giving a free seminar sponsored by the LePoidevin Group.  The full details and online registration form are in the following link: www.realestate2013.ca On the agenda:

Slowing population growth in Toronto hits the headlines: Implications for housing demand

FEBRUARY 01, 2013

Just a quick note to highlight some data in CMHC's latest Housing Now publication covering the GTA.  But before I get to that, I would like to repost a portion from a recent post on trends to watch in 2013:

Toronto sales come in flat in January; Huge questions about inventory; Downtown condo market still under stress

FEBRUARY 06, 2013

Reminder to readers:  I'll be in Toronto later this month talking about housing, the economy, and investing trends.  Reserve your complimentary seats here.   Toronto sales flat compared to last January

Canadian housing and economic trends: The good, the bad, and the ugly

APRIL 09, 2013

It's been a while since I've been able to find the time to post here.  Interest in Canadian housing research has gone parabolic in the past couple months.....for obvious reasons.  As a follow-up to a post I did in January on housing trends to watch, I thought I'd throw out some observations on what's happening in Canada on the housing and macro economic front in terms of the good, the bad, and the ugly data points.